Now he's pouring money into Softbank subsidiary Yahoo! BB with the same vigor. It's easy to see why customers are flocking to high-speed, low-cost DSL: In Japan, monthly tolls for 56-Kbps users regularly exceed $90. Yahoo! BB's low price comes from the technology in its underlying network.

In the US, DSL still routes through asynchronous transfer mode switches, old-school phone equipment that's reliable but inefficient, prone to breakdowns, and profligate with bandwidth. Softbank's network opts instead for gigabit Ethernet switches, which transmit data via IP routers. Thanks to lower maintenance costs, a GbE network can be up to 100 times cheaper to operate than an ATM backbone - even while providing faster speeds.

And it handles voice like a dream. With traditional VoIP, a call is converted to data packets, which hop from an IP network onto a phone network, like NTT's, through ATM switches. But ATM switches were designed to handle old-fashioned phone calls. They tend to leak data, which erodes call quality. With an end-to-end Ethernet network, there is no ATM switching - "Our packets stay inside the network," says Hashimoto, "so there is no spill." The sound quality of a Yahoo! BB call is indistinguishable from a fixed-line call.

The difference is the price, and it's a whopper. Average rates are just a tenth of what NTT charges, and Yahoo! BB customers call each other for free. The number of subscribers has rocketed to 2.5 million since VoIP service was added in April 2002.

To NTT, which collects nearly 40 percent of its revenue from fixed-line calls, it's an alarming trend. "If toll calls just disappeared, it would crush them," says Ito. "The question is whether technologists can convince the financial analysts that phone companies are securing their bonds with equipment that isn't worth anything anymore," he continues. "If that happens, the phone companies could go ka-boom!"

For Son to benefit from such a seismic shift in telecom, he must first succeed with a company quite different from its namesake. Unlike the Internet portal, Yahoo! BB is capital-intensive. Before the first packet ever flowed, the network had cost Softbank $1.3 billion. Couple that investment with a huge customer acquisition budget, and Yahoo! BB needs to hold a subscriber for 15 months just to break even. That makes Son's gamble audacious - even by his own lofty standards.

As a Korean growing up on the southern Japanese island of Kyushu, Masayoshi Son was a frequent target of playground bigotry, despite his family's adoption of a Japanese surname, Yasumoto. He is not, however, a rags-to-riches story. His father ran a thriving chain of pachinko parlors. At 16, Son shipped off to California to learn English and eventually enrolled at UC Berkeley.

A born hustler, he imported cheap Space Invaders machines from his dad, renting them to laundromats and splitting the proceeds. He also patented a pocket-sized electronic dictionary and cold-called companies until Sharp bought it for $1 million.

Son founded Softbank in 1981 as a PC software distributor. It was lucrative work - but rather anonymous for the ambitious Son, who considered himself a worthy peer to the US tech elite. In 1994, he helped Cisco CEO John Chambers corner the Japanese router market by luring 14 companies to invest in Nihon Cisco; Son received a nice stake for his troubles and earned a reputation as a rainmaker.

A year later, flush with cash from taking Softbank public, Son began looking to buy up online real estate. Nicknamed "Mr. Internet" back home, he spoke of creating the cyberworld's premier zaibatsu, a pre-World War II term for Japan's vertically integrated conglomerates.

Another handle Son picked up was "the Bill Gates of Japan." His personal wealth was estimated at $76 billion in 2000, when he breathed down the neck of Paul Allen on the Forbes 400. He built a Tokyo technomansion to rival Gates' estate - the highlight being a programmable golf range that can precisely mimic a Pebble Beach fog or an Augusta dogleg. (Son brags that the course once spurred a visiting Gates to utter the ultimate compliment: "Wow!") Then there's his fondness for argyle sweaters, similar to Bill's frumpy threads.

American business held up Son as a model of the New Japan. It helped that he spoke fluent English, told ironic jokes, and shook hands rather than bowed. Son was the sort of chummy, outspoken Japanese executive that Westerners could safely embrace.

Then the markets buckled, exposing the less than rigorous decisionmaking behind Son's investments. For example, he once gave E*Trade $400 million based on a single phone call from the company's founder. Like so many Softbank companies, E*Trade has since flatlined, its stock price dipping to less than $3 from a mid-1999 high of about $60. (Softbank's current stake is worth $22 million.) And, of course, Son's own net worth has cratered to around $1.1 billion, a slide that makes him History's Biggest Money Loser.

There could be more carnage to come. Son has frequently been faulted for creative accounting. Even veteran analysts have trouble making sense of Softbank's maze of partnerships and subsidiaries. "Softbank's method of business is to shift money from one pocket to the other at an accelerated rate," says Ben Wedmore, an HSBC analyst and a vocal Son critic. "When the first pocket generates losses, you IPO the second. They've done it again and again."

No amount of financial engineering, however, can cover up Softbank's mounting losses. Despite profits at Yahoo! Japan, which has benefited from increased use of its flagship portal, the rest of Softbank's assets are dead weight. Last fiscal year, the company booked a record $842 million loss; in announcing the results, Son insisted profit could come "at any time." To some, Softbank's resilience defies logic.

"I thought it would be bankrupt by last August," says Wedmore.

To keep Yahoo! BB growing, Son is selling off other Softbank assets. He's already shed 16 percent of his Yahoo! Japan holdings. There's also the proposed sale of Aozora Bank, a huge controversy in Japan. When Son purchased the bank from the government two years ago, he promised that he'd hold on to it and nurse it back to health. The quick reversal is not endearing him to Tokyo politicians.